Commentary on Political Economy

Monday, 31 October 2011

‘Time Is Money’ – Intellectual Origins of the Neoclassical Revolution, Part One.

There
are two sides to human activity. The very “necessity” of human action requires
a mediation between volition and gratification, between ends and means. The
ends are “ideal” and the means are the ex-pression of volition through human
instrumental action that takes place
(a “place” is the material expression of human activity which is
indistinguishable from ec-sistence). Both the projection of the ideal ends and
the manifestation of the means are human “needs”. The point is to ensure that
human activity does not become destructive in the sense that it foreseeably
defeats its purpose by negating or barring the harmonious expression of this
“system of needs”.

The
task of German Idealism, culminating in the Absolute Idealism of Hegel and in
the historical materialism of Marx, is to enucleate this “finality” of human
living activity in the reconciliation of volition (the will) with freedom (the
limits of the scope of the will on the environment, above all the “human”
environment). Human living activity is an ex-pression of the will, it is its
ful-filment, that dis-covers or un-conceals (the Greek meaning of a-letheia, a
remembrance that un-covers the truth) the inter
esse (“interest”, the common being) of human beings as beings human, as
individual manifestations of the species.

Even
British Utilitarianism, from Hobbes to Locke and Bentham through the “science”
of Classical Political Economy, allows the homologation of human activity as an
inter-est, a common being, through the mediation of “labour”. The “labour” is
intended as a mechanical “power” – a “force” that works in time – and that can be measured and quantified in terms of
the “utility” of its “pro-ducts” – the “goods” it “brings forth”. And because
this “utility” is not “subjective”, because it is inter-subjective, it can be
quantified even to the extent that it can be “exchanged” for the “labour” of
other human beings. In other words, this “labour” becomes a “quantity” that can
be accumulated or “saved” in the shape of its material pro-ducts so that it can
then be utilized “to purchase or acquire” the “labour” of other human beings in
the form of “wages”.

Even
in the form articulated by Karl Marx, even with the distinction that he drew
between “labour” and “labour power”,
the fact that Marx uncritically accepted the ability of “the market mechanism”
to allocate labour-power as a resource through its “measure” as “socially necessary labour time” – this fact meant
that the objectification of human living labour into its pro-ducts as “dead
labour” was accepted universally even by the Socialist parties that represented
the industrial proletariat from the second half of the nineteenth century.

Even
when “labour” is understood as “labour power”, and perhaps especially then, its “utility” is accepted as being
“inter-subjective”: labour is the source of all “addition” of human wealth to
the “wealth” already freely available in “nature”. By “trans-forming” nature,
labour “creates and pro-duces” goods that have universal human “utility”.
Consequently, human “labour” constitutes the “social synthesis” – the ability
of human beings to reproduce themselves and their societies physically and to
accumulate wealth – “to grow” their economy.

The
“satisfaction” of human needs and desires comes at the “cost” or “price” of
human effort, of “labour”, of toil – a reminder that excessive material
gratification negates the spirituality of mankind and constitutes a neglect of
religious duty: in excessive amounts, it may even amount to sinful conduct.
“Labour as toil”, therefore, can be also a form of “penitence”, of atoning for
the sins of the flesh: the Benedictine command of “Ora et labora” (work and
pray) calls the faithful to an existence of “renunciation” of wordly goods in
exchange for other-wordly rewards.

This
is the essence of the “calling”, of the Askesis, of the ascetic ideal described
by Weber as the origin of the “spirit of capitalism”: the elevation of “labour”
to “an end in itself” finally degenerates in the accumulation of the “goods” it
produces – especially when these goods can be “exchanged” for the labour-power
of other human beings. And here we have truly the origins of capitalism: - NOT
in the Askesis, but rather in the ability to command the “labour-power” of formally
“free” human beings!

Max
Weber not only fails to perceive this essential distinction, but he also makes
the error of identifying the centrality of “labour” as the ascetic ideal with
the genesis of “the spirit of capitalism” and, therefore, with the birth of “a
specifically bourgeois economic ethic”. So long as “labour” – however
understood - remains the “essence” of “wealth”, the bourgeoisie will never be
able to breathe easily or sleep peacefully. – And that for reasons that are too
obvious to discuss, really. Even in its “socialistic” acceptation – from the
left Ricardians to Keynesians, from Proudhonians to Kaleckians – the
bourgeoisie barely tolerates the “goody-goody” moralizing of these “wet”
ideologists.

The
only “economic theory” that can serve as “a specifically bourgeois ethic” or
strategy (“ideology”) is one that stresses the paramountcy of “capital” in the
process of production. But to do so, what must be defeated if not confuted first is precisely this archaic centrality
of the Arbeit (“labour”) in the
history of Western metaphysics, from the Bible (Paul Samuelson in his Economics textbook cites the Old
Testament: “The laborer is worthy of
his hire”!) to Paul Krugman’s
“Conscience of A Liberal”, all drenched as it is in Keynesian buffoonery and
mental confusion. And the centrality of “labour” consists all in this
“egregious and nefarious” belief – this absurd “faith” – in the ability of
“labour” to provide “the social synthesis” – to be “social labour” – to act as
the foundation of the inter esse, of
the “common being”, of what turns atomised “human beings” into “beings human”.

The
Neoclassical Revolution that began in the middle of the nineteenth century is
perhaps the most imponent ideological and conscious effort ever performed in human
history by a social class to defeat the ideology of another class using all the
power influence and resources – intellectual, religious and propagandistic –
available to the capitalist bourgeoisie on the back of its exploitation of
human living labour.

Closely linked to the “reaction” against the
French Revolution and the European uprisings of 1830 and 1848, the theory of
marginal utility first excogitated by Gossen, was elaborated in German
engineering circles and then divulged by Jevons and Menger, then Bohm-Bawerk
and the Austrian School, until it was promulgated and widely publicized by
Marshall and formalized mathematically by Walras as “general equilibrium
analysis”.

In
our next intervention, we will take a closer look at this “Copernican revolution”
(it is the claim made by Stanley Jevons about the importance of his theory,
reported by Keynes in “Essays In Biography”) or rather “counter-revolution”.